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Exhibit 10.1
I NDEMNIFICATION
A GREEMENT
This I NDEMNIFICATION A GREEMENT (this "
Agreement ") is made this 4th day of August, 2006, between
Diametrics Medical, Inc., a Minnesota corporation (the "
Company "), and
(the "Indemnitee").
WHEREAS, it is essential to the Company and its stockholders to
attract and retain qualified and capable directors, officers,
employees, agents and fiduciaries;
WHEREAS, the Bylaws of the Company (the "Bylaws") require the
Company to indemnify and advance expenses to its directors and
officers to the extent not prohibited by law and, subject to the
approval of the Board of Directors of the Company, allows the
Company to indemnify employees and agents; and
WHEREAS, in recognition of Indemnitee’s need for
protection against personal liability and in order to induce
Indemnitee to serve or continue to serve the Company in an
effective manner and to supplement or replace the Company’s
Directors’ and Officers’ liability insurance coverage,
if any, and in part to provide Indemnitee with specific contractual
assurance that the protection promised by the Certificate of
Incorporation will be available to Indemnitee, the Company wishes
to provide the Indemnitee with the benefits contemplated by this
Agreement.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Definitions . The following terms, as used herein,
shall have the following respective meaning:
An " Affiliate " of a specified Person is a Person who
directly, or indirectly through one or more intermediaries,
controls or is controlled by, or is under common control with, the
Person specified.
The term " Associate " used to indicate a relationship
with any Person shall mean:
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(i)
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any corporation or organization (other than the
Company or a Subsidiary) of which such Person is an officer or
partner or is, directly or indirectly, the Beneficial Owner of ten
(10) percent or more of any class of Equity
Securities;
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(ii)
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any trust or other estate in which such Person
has a substantial beneficial interest or as to which such Person
serves as trustee or in a similar fiduciary capacity (other than an
Employee Plan Trustee);
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(iii)
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any Relative of such Person; or
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(iv)
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any officer or director of any corporation
controlling or controlled by such Person.
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" Beneficial Ownership " shall be
determined, and a Person shall be the "Beneficial Owner" of all
securities which such Person is deemed to own beneficially,
pursuant to Rule 13d-3 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (or any successor
rule or statutory provision), or, if such Rule 13d-3 shall be
rescinded and there shall be no successor rule or statutory
provision thereto, pursuant to such Rule 13d-3 as in effect on the
date hereof; provided , however , that a Person
shall, in any event, also be deemed to be the Beneficial Owner of
any Voting Shares:
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(i)
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of which such Person or any of its Affiliates or
Associates is, directly or indirectly, the Beneficial Owner;
or
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(ii)
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of which such Person or any of its Affiliates or
Associates has: (A) the right to acquire (whether such right
is exercisable immediately or only after the passage of time),
pursuant to any agreement, arrangement or understanding or upon the
exercise of conversion rights, exchange rights, warrants or
options, or otherwise; or (B) sole or shared voting or
investment power with respect thereto pursuant to any agreement,
arrangement, understanding, relationship or otherwise (but shall
not be deemed to be the Beneficial Owner of any Voting Shares
solely by reason of a revocable proxy granted for a particular
meeting of stockholders, pursuant to a public solicitation of
proxies for such meeting, with respect to shares of which neither
such Person nor any such Affiliate or Associate is otherwise deemed
the Beneficial Owner); or
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(iii)
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of which any other Person is, directly or
indirectly, the Beneficial Owner if such first mentioned Person or
any of its Affiliates or Associates acts with such other Person as
a partnership, syndicate or other group pursuant to any agreement,
arrangement or understanding for the purpose of acquiring, holding,
voting or disposing of any shares of capital stock of the Company;
and provided further, however, that: (A) no director or
officer of the Company, nor any Associate or Affiliate of any such
director or officer, shall, solely by reason of any or all of such
directors and officers acting in their capacities as such, be
deemed for any purposes hereof, to be the Beneficial Owner of any
Voting Shares of which any other such director or officer (or any
Associate or Affiliate thereof) is the Beneficial Owner; and
(B) no trustee of an employee stock ownership or similar plan
of the Company or any Subsidiary ("Employee Plan Trustee") or any
Associate or Affiliate of any such Trustee, shall, solely by reason
of being an Employee Plan Trustee or Associate or Affiliate of an
Employee Plan Trustee, be deemed for any purposes hereof to be the
Beneficial Owner of any Voting Shares held by or under any such
plan.
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A " Change in Control " shall be deemed to
have occurred if:
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(i)
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any Person (other than an Excepted Person) is or
becomes, after the date of this Agreement, the Beneficial Owner of
20% or more of the total voting power of the Voting
Shares;
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(ii)
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during any period of two consecutive years (not
including any period prior to the execution of this Agreement),
individuals who at the beginning of such period constitute the
Board of Directors of the Company and any new director whose
election or appointment by the Board of Directors or nomination or
recommendation for election by the Company’s stockholders was
approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the
beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to
constitute a majority thereof;
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(iii)
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the stockholders of the Company approve a merger
or consolidation of the Company with any other corporation, other
than a merger or consolidation which would result in the Voting
Shares of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by
being converted into Voting Shares of the surviving entity) at
least 80% of the total voting power represented by the Voting
Shares of the Company or such surviving entity outstanding, or the
stockholders of the Company approve a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company’s assets;
or
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(iv)
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a change in control of a nature that would be
required to be reported in response to Item 6(e) of Schedule
14A of Regulation 14 (or a response to any similar item on any
similar schedule or form) promulgated under the Securities Exchange
Act of 1934, as amended, as in effect on the date hereof, whether
or not the Company is then subject to such reporting
requirement.
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" Claim " means any threatened, pending or
completed action, suit, arbitration, alternate dispute resolution
mechanism, investigation, administrative hearing or any other
proceeding brought by, against, or in the right of the Company or
otherwise, or any inquiry or investigation that Indemnitee in good
faith believes might lead to the institution of any such action,
suit, arbitration or proceeding, whether civil, criminal,
administrative, investigative or other, or any appeal
therefrom.
" Corporation Law " means the Minnesota Business
Corporation Act, as amended, or the corporate law of any other
jurisdiction in which the Company is reincorporated by merger or
otherwise.
" D&O Insurance " means any valid directors’
and officers’ liability insurance policy maintained by the
Company which covers members of the Company’s board of
directors and executive officers of the Company, including
Indemnitee, if any.
" Determination " means a determination, and "
Determined " means a matter which has been determined based
on the facts known at the time, by:
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(i)
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a majority vote of a quorum of disinterested
directors; or
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(ii)
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if such a quorum is not obtainable, or even if
obtainable, if a quorum of disinterested directors so directs, by
Independent Counsel in a written opinion; or
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(iii)
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in the event there has been a Change of Control,
by Independent Counsel (in a written opinion) selected by
Indemnitee as set forth in Section 6.
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" Equity Security " shall have the meaning
given to such term under Rule 3a11-1 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as in effect
on the date hereof.
" Excepted Person " is:
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(i)
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the Company or any Subsidiary;
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(ii)
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any pension, profit sharing, employee stock
ownership or other employee benefit plan of the Company or any
Subsidiary or any trustee of or fiduciary with respect to any such
plan when acting in such capacity; or
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(iii)
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any Person who is as of the date hereof the
Beneficial Owner of 20% or more of the total voting power of the
Voting Shares.
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" Excluded Claim " means any payment for
Losses or Expenses to the extent that any Claim:
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(i)
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is based upon or attributable to Indemnitee
gaining in fact any personal profit or advantage to which
Indemnitee is not entitled;
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(ii)
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is for an accounting of profits in fact made from
the purchase or sale by Indemnitee of securities of the Company in
violation of Section 16 of the Securities Exchange Act of
1934, as amended, or similar provisions of any state
law;
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(iii)
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results from Indemnitee’s willful or
knowingly dishonest or fraudulent misconduct;
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(iv)
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is one for which the payment of which by the
Company under this Agreement is not permitted by applicable law;
or
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(v)
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is one for which payment has actually been made
to or on behalf of Indemnitee under any insurance policy or other
indemnity provision, except with respect to any excess beyond the
amount paid under any insurance policy or other indemnity
provision.
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" Expenses " means any and all reasonable
expenses incurred by Indemnitee as a result of a Claim or Claims
made against Indemnitee for Indemnifiable Events including, without
limitation, attorneys’ fees and all other costs, expenses and
obligations paid or incurred in connection with investigating,
defending, being a witness in or participating in (including on
appeal), or preparing to defend, be a witness in or participate in
any Claim relating to any Indemnifiable Event.
" Fines " means any fine, penalty or, with respect to an
employee benefit plan, any excise tax or penalty assessed with
respect thereto.
" Indemnifiable Event " means any event or occurrence,
whether occurring prior to or after the date of this Agreement,
related to the fact that Indemnitee is, was or agreed to serve as,
a director, officer, employee, trustee, agent or fiduciary of the
Company, or is or was serving (or had agreed to serve) at the
request of the Company as a director, officer, employee, trustee,
agent or fiduciary of another corporation, partnership, joint
venture, employee benefit plan, trust or other enterprise, or by
reason of anything done or not done by Indemnitee in any such
capacity, including, but not limited to, any breach of duty,
neglect, error, misstatement, misleading statement, omission, or
other act done or wrongfully attempted by Indemnitee, or any of the
foregoing alleged by any claimant.
" Independent Counsel " means a law firm, or a member of
a law firm that is experienced in matters of corporation law and
neither presently is, nor in the past five years has been, retained
to represent: (i) the Company or Indemnitee in any matter
material to either such party, or (ii) any other party to the
Claim giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall
not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of
interest in representing either the Company or Indemnitee in an
action to determine Indemnitee’s rights under this Agreement.
If a Change in Control has not occurred, Independent Counsel shall
be selected by the Board, with the approval of Indemnitee, which
approval will not be unreasonably withheld. If a Change in Control
has occurred (other than a Change in Control which has been
approved by a majority of the Company’s Board of Directors
who were directors immediately prior to such Change in Control, in
which case the sentence immediately preceding this sentence shall
apply), Independent Counsel shall be selected by Indemnitee, with
the approval of the Board, which approval may not be unreasonably
withheld.
" Losses " means any amounts or sums which Indemnitee is
legally obligated to pay as a result of a Claim or Claims made
against Indemnitee for Indemnifiable Events including, without
limitation, damages, judgments and sums or amounts paid in
settlement of a Claim or Claims, and Fines.
" Person " means any individual, partnership,
corporation, business trust, joint stock company, trust,
unincorporated association, joint venture, governmental authority
or other entity of whatever nature.
" Relative " means a Person’s spouse, parents,
children, siblings, mother- and father-in-law, sons- and
daughters-in-law, and brothers- and sisters-in-law.
" Subsidiary " means any corporation of
which a majority of any class of Equity Security is owned, directly
or indirectly, by the Company.
" Voting Shares " means any issued and outstanding shares
of capital stock of the Company entitled to vote generally in the
election of directors.
2. Basic Indemnification Agreement . The Company agrees
that in the event Indemnitee is or becomes a party to or witness or
other participant in, or is threatened to be made a party to or
witness or other participant in, a Claim by reason of (or arising
in part out of) an Indemnifiable Event, the Company will indemnify
Indemnitee to the fullest extent permitted by law, against any and
all Losses and Expenses (including all interest, assessments and
other charges paid or payable in connection with or in respect of
such Losses and Expenses) in respect of such Claim, whether or not
such Claim proceeds to judgment or is settled or otherwise is
brought to a final disposition, subject in each case, to the
further provisions of this Agreement. To the extent that a change
in the Corporation Law (whether by statute or judicial decision or
reincorporation of the Company in another jurisdiction whether by
merger or otherwise) permits greater indemnification by agreement
than would be afforded currently under the Bylaws and this
Agreement, it is the intent of the parties hereto that Indemnitee
shall enjoy by this Agreement the greater benefits so afforded by
such change.
3. Limitations on Indemnification . Notwithstanding the
provisions of Section 2, Indemnitee shall not be indemnified
and held harmless from any Losses or Expenses:
(a) which have been Determined, as provided herein, to
constitute an Excluded Claim;
(b) to the extent Indemnitee is otherwise indemnified by the
Company and has actually received payment pursuant to the Bylaws,
D&O Insurance or otherwise; or
(c) other than pursuant to the last sentence of
Section 4(d) or Section 13 in connection with any claim
initiated by Indemnitee, unless the Company has joined in or the
Board of Directors has authorized such claim.
4. Indemnification Procedures .
(a) Promptly a
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